Answer Happy

Custom Cabinetry has one job in process (Job 120) as of June 30;
at that time, its job cost sheet reports direct materials of
$8,600, direct labor of $3,600, and applied overhead of $3,060.
Custom Cabinetry applies overhead at the rate of 85% of direct
labor cost. During July, Job 120 is sold (on credit) for $31,000,
Job 121 is started and completed, and Job 122 is started and still
in process at the end of July. Custom Cabinetry incurs the
following costs during July.
1. Prepare journal entries for the following July
transactions and
events a through e.

a. Direct materials used.
b. Direct labor used.
c. Overhead applied.
d. Sale of Job 120.
e. Cost of goods sold for Job
120. Hint: Job 120 has costs from June and
July.

2. Compute the July 31 balances of the Work
in Process Inventory and the Finished Goods Inventory accounts.
(There were no jobs in Finished Goods Inventory at June 30.)